Monday, 25 January 2016

Raise the minimum wage! - My speech from the States debate

Last week I brought forward a proposition to the States Assembly to raise the minimum wage in line with the latest increase for the UK's new "National Living Wage", set to be £7.20ph from the 1st April, meaning our own minimum wage will have fallen behind theirs for the first time.

Just 10 States Members supported this part of the proposition, however I won part B in a tight 25-23 vote to hold a review into the possibility of a significant rise in the minimum wage in the near future.

A small victory, but one which I'm proud of.

Here is my speech proposing this measure -

As I sat down to write this speech yesterday evening, the news headline that I could see on my computer screen read: “Wealth of the world. Richest 1 per cent now equal to other 99 per cent.” 

This was the calculation that Oxfam has made using the data they acquired from Credit Suisse for the report which they released recently entitled An Economy for the 1 per cent. They also found that the richest 62 people in the world had as much wealth as the poorest half of the global population combined. Now just 5 years ago it would have taken 388 individuals to have had the same wealth as the bottom 50 per cent, so much worse has income inequality become in such a short space of time. 

It is because I believe in equality and social justice that I find these figures to be absolutely grotesque. I believe wholeheartedly that it is the Government’s responsibility to do what it can to create a more equal and fair society and I believe that in Jersey, the picture is no different. 

The Income Distribution Survey which was released at the end of last year has shown that inequality in Jersey has now become worse than in the United Kingdom when the previous survey 5 years ago showed then we were doing better than them. The average standard of living for the poorest 20 per cent in Jersey has reduced by 17 per cent over the past 5 years; 56 per cent of single-parent households are now living on a relative low income and so are a third of pensioners. 

All of this has happened, as a Freedom of Information request has shown, that in the past decade the number of people in Jersey earning above £1 million a year has quadrupled. 

I believe that, sadly, things are probably going to get worse from here on in. The Government, which is pursuing what some of us consider to be an ideologically-driven austerity agenda, has already decided to cut £10 million worth of support to the poorest and most vulnerable people in Jersey: that is the pensioners, single-parent families and disabled Islanders. 

Now the world is becoming a more unfair and unequal place and it is getting worse because of complacent governments who, let us be perfectly honest here, are beholden to the interests of a small minority group in whose interests they serve, despite not having any real democratic mandate to do so, and despite any evidence whatsoever that this economic strategy will produce any long- term or widespread benefits for the population as a whole. In fact, all the evidence from the O.E.C.D. (Organisation for Economic Co-operation and Development) and the I.M.F. (International Monetary Fund) shows that the exact opposite is true and it is the more equal societies which have better prospects for economic growth and happier societies as well. 

Now Oxfam made several recommendations on how they think governments can reverse this trend and begin to make a tangible difference to ordinary people’s lives and to the economy. They made suggestions like ending the gender pay gap, reducing the price of health care, taxing wealth rather than consumption and using progressive public spending to tackle inequality, which is pretty much basically the Reform Jersey manifesto. 

But one of the fundamental suggestions they made was to introduce a living wage so this is what my proposition today is about moving towards. 

Now the Chief Minister said about a year ago that he was going to make reducing poverty one of his Government priorities. Then we saw a few months later the publication of the Strategic Priorities document in which the word “poverty” did not appear once and instead it laid down the foundations for a fiscal plan over the next 3 years which is probably going to make conditions for the poorest and most vulnerable people in Jersey much worse. 

At the time I challenged the Chief Minister and said, when he made that statement at the time, to support Reform Jersey’s then proposition which was being brought forward by Deputy Southern to raise the minimum wage to demonstrate his commitment to reducing poverty, which he declined to do so then, and has indicated that he will be doing the same this time round. 

Now at the time ... well there was a time previously when people like me could have just dismissed that and said: “Well, yes, it is just what you expect. It is the same old Tories ideologically attached to a broken economic model which serves the few above the many just like they always do.” But, no, not this time. Because even the Conservative Party in the U.K. is surpassing everybody’s expectations and increasing the minimum wage and setting out a path to a £9 an hour national living wage by the end of the current Parliament in 2020, not only outdoing what the Labour Party was suggesting they would do if they got into Government, but also leaving Jersey’s Government even more isolated in this political context. 

So I say if Reform Jersey can plagiarise George Osborne’s policies, surely it is not too much to ask the Council of Ministers to do it just this once as well. 

So, as my report says, if you take the current trends we have seen in the nominal increases in the minimum wage since it was introduced, it is going to take Jersey an entire decade before we reach the U.K.’s level of £9 an hour. We are not going to get there until 2030. Now surely that cannot be right to say that we are going to allow the situation to develop where we are an entire decade behind the U.K. on how we pay the lowest-paid workers in Jersey. 

So the question I ask to States Members is this, is it acceptable for Jersey to have a minimum wage which is a decade behind the U.K.’s? I do not believe that there will be Members of this Assembly who seriously believe that that is a tolerable situation. If you accept that it is not tolerable, as I suspect most Members do, then surely the position, the automatic position, is to support at least part (b) of this proposition because we all accept hopefully that there is a problem with the minimum wage which is going to have to be addressed in some form or another. 

Because the fact is that the campaign for a decent living wage is not going to disappear any time soon. The principles of it are becoming more mainstream every single day and more and more Governments of all political persuasions, politicians, businesses and economists are understanding the value of the concept and working towards putting it into practice. 

So, the minimum wage is never going to go down; it is only ever going to go up. The question is by how much and how fast? 

That question of speed is a fair question and it is one which is alluded to in the Council of Ministers’ comments. 

They talk about giving appropriate notice for businesses and they also refer to the legitimate worries which were expressed by the Chamber of Commerce about getting it right with sensible increases rather than big jumps. Of course, I completely agree with what they say in this area as, to be honest, I often do. 

But the fact is, because we are set to be a decade behind the U.K. unless we take action, and the timetable that is given in the Council of Ministers’ comments shows that we might not make any meaningful progress until 2018, that means that we would end up with just 2 years to catch up or we would fall behind, neither of which, to be perfectly honest, is an acceptable situation. So this proposition means that we would have double the length of time to spread out these increases which would surely make it easier for businesses to cope with it. So I do not particularly buy that argument being pursued by the Council of Ministers. 

So I know when I sit down and the debate begins we will hear, I presume, from the Minister for Social Security, who will lay out the position of herself, her department and the wider position of the Government, and I want to ask Members when she speaks, or when the Chief Minister speaks, to listen to the words being used and, in your head, work out what is being argued. Is it an argument against the proposition or is it an argument against the living wage altogether? I think we are likely to see that most of it will be an underlying distrust of the idea that paying our lowest workers a bit more would be good for the economy. 

So the comments which were lodged by the Council of Ministers at the last minute - which seems to be what they do as a matter of standard practice now - a couple of times it refers to businesses offsetting the increased wages with job losses which, to be frank, is the same old tired line that has always been used about the minimum wage. It was said before the minimum wage was first introduced that it would cause mass unemployment, and the same Doomsday predictions are made when it is suggested that it is raised, and every single time they are proven to be either complete nonsense or fantastically simplistic. 

The evidence shows that when unemployment is able to be attributed to a rise in the minimum wage it is usually offset by the employment that is created by the extra economic growth, which is inevitable when the lowest-paid workers get more disposable income. So the idea that it creates unemployment simply cannot be demonstrated to be true in any way which is not a simplistic, overly-simplistic, and therefore inaccurate way of looking at the situation. 

I find it strange that when the Government proposes its own increases to the minimum wage, which it does more or less every year, that this argument does not seem to be raised. It is only when we talk about doing further rises to it that that somehow comes forward as an argument which shows to me that the position is held disingenuously. 

So, this proposition, part (a) of which is to agree that from 1st April next year we are not going to let Jersey’s minimum wage fall behind what will be the effective minimum wage in the U.K. Okay, they are not calling it a minimum wage, it is the national living wage, which is a title that they have been criticised for giving it because it is misleading at the end of the day, but it is essentially what the minimum wage will be for the vast majority of workers in the U.K. It is about saying: “We are not going to let an Island which has a cost of living which is much higher than the U.K. fall behind.” I think that is an entirely sensible position and that is what part (a) is about. 

Part (b) is about saying: “Right, well, we know what the future of the effective minimum wage in the U.K. is going to be. We know it is going to be £9 an hour by 2020.” It is about saying: “Right, knowing that that is the context that we find ourselves in, we need to look at ours because we cannot have the situation where we end up falling 10 years behind it.” So that is what this proposition does. It gives the States an opportunity to debate that and consider those points. I hope that at least one part of the proposition can be seen as acceptable and therefore adopted. From my point of view, I am doing it to show my support for Jersey’s lowest-paid workers who are struggling more than ever to make ends meet.

I hope that Members are not too ideologically aligned to an economic ideology which is being shown all around the world to be a complete failure. I hope Members will demonstrate on this argument to be on the right side and to support our lowest-paid workers.